Economics of

Sustainability
Education

Prof.dr. Elbert Dijkgraaf

 Contents
1. SDG’s
2. Developments education
3. Paper Coady and Dizioli
4. Paper Brixiova
5. Next lecture
 1. SDG’s
• 4: Ensure inclusive and equitable quality education and
promote lifelong learning opportunities for all:
– Primary and secondary education
– Early childhood: education for all when they are young
– Technical, vocational, tertiary (incl. university) and adult education
– Skills for work
– Equity: education for all
– Literacy and numeracy
– Global citizenship and skills for sustainable development
– Education facilities and learning environments for all
– More scholarships for developing countries
– Good and enough teachers
 1. SDG’s
• Why important:
– Lack of education fuels poverty
– Lack of education fuels inequality, especially for women,
disabled people
– Education makes economic development possible:
resilience of the poor is increased
– Education should be life long given the rapid changes at the
labor market
• By whom:
– Private initiatives
– Government very important
 2. Developments education
• How is it done?
– Legislation
– Policy planning and coordination
– Validation and accreditation of education
– Dialogue
– Monitoring
– Curriculum and teacher training
– Assessment of outcomes
– Increase efficiency
– Budget
 2. Developments education
• A lot is done, a lot should be done
 2. Developments education
• A lot is done, a lot should be done: covid doesn’t help
 2. Developments education
• Tertiary school enrollment very different
Tertiary school enrollment (%)
90

80

70

60

50

40

30

20

10

0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

World EU US China Africa Tanzania

 2. Developments education
• Less education for low-income population
 2. Developments education
• Gender caps are closing, but still present
 2. Developments education
• But it can be the other way around
 2. Developments education
• Access to basic facilities problem in Africa
 2. Developments education
• Quality concentrated in developed countries
 2. Developments education
• Budgets very different, even in developed countries
 3. Paper Coady and Dizioli
• Income inequality is rising due to:
– Globalization
– Liberalization of factor and product markets
– Skill-biased technological change
– Increase labour participation low-skilled workers
– The fiscal system
– Bargaining power of high earners
– Growing share of high-earning couples
– Single parent households
• But also positive effects on growth and poverty
reduction
• Focus: relation education and income inequality
 3. Paper Coady and Dizioli
• Education can help to decrease income inequality:
– Stimulates growth
– Breaks intergenerational transmission of poverty
– Increases individual opportunities
• If it helps: less fiscal redistribution is necessary
• New compared with literature:
– Deals with endogeneity issues
– Deals with persistence (only slow changes over time)
– Heterogeneity between countries (developed and developing)
– Heterogeneity between age groups
 3. Paper Coady and Dizioli
• Human capital model: distribution of income is
dependent on level and distribution of education:
– Increase in education inequality leads to more income
inequality
– Increase in level education can have positive and negative
effects on income inequality:
• If returns of schooling are equal or lager at higher levels, income
inequality increases
• If returns of schooling get lower at higher levels, income inequality
decreases

• Estimation of income inequality, dependent on

education level and education inequality
• Dynamic panel estimation for endogeneity and
persistence
 3. Paper Coady and Dizioli
• Findings:
– Schooling inequality increases income inequality
– But less so for advanced economies
– Schooling level has positive, but insignificant effect
– Thus, focus should be on fighting schooling inequality
– For developed countries this effect is smaller, thus other instruments
are necessary then
 4. Paper Brixiova et al.
• Entrepreneurship driven by men in developing
countries
• Stimulation of women entrepreneurship
• New: study on non-cognitive skills and relation with
education
• Female entrepreneurs more in informal and low-
skilled sectors
• On average women start with lower education, less
skills, less confidence
• Central question: what is effect of training?
• Methodology: theoretical model (study that!) and
empirical analysis
 4. Paper Brixiova et al.
• Empirical analysis: survey, interviews, focus groups in
Eswatini (former Swaziland)
• Facts:
– Men have more tertiary education
– Businesses of men have sales, resources and employment
– Financial literacy is comparable
– Females had more business training
– Both men and women think gender is not a bias (82%)
 4. Paper Brixiova et al.
• Results:
– More skilled people have higher sales
– Trained women outperformed men
– Financial training helps men, but not women
– Tertiary training helps women, especially when combined
with financial training:
• tertiary training gives women the skills to use financial training
• or programs are men-biased and thus ill designed
• or apples and pears are compared, e.g. because businesses of men are
bigger and they might have experienced more skills as a result of that
making for them financial training more productive
– Tenacity is important (persistence in the face of obstacles)
– For males the goal of autonomy has a large effect (not for
women)
 4. Paper Brixiova et al.
• Conclusion: education alone is not always enough,
combine it with the skills necessary
• Tertiary education might give people (and in this
example especially women) the skills to absorb
other training programs
• For men tenacity increases the effectiveness of
training (for women not)
• For women tenacity increases sales
• Entrepreneurial programs should be well targeted
with respect to skills
 5. Next lecture
• Ton Heerts
• Former chairman of FNV and MBO-raad and current mayor of
Apeldoorn
• What can we learn from the Dutch experience:
– How do policies increase inclusive and equitable education?
– How is quality stimulated?
– How is lifelong learning stimulated?
 Literature
• Coady, D. and A. Dizioli (2017), Income inequality and
education revisited: persistence, endogeneity and
heterogeneity, Applied Economics, 50:25, 2747-2761.
• Brixiova, Z., T. Kangoye and M. Said (2020), Training, human
capital, and gender caps in entrepreneurial performance,
Economic Modelling, 85, 367-380.